Earnings Per Share

3 Months Ended

Mar. 31, 2017

Earnings per share

Earnings Per Share

(4)          Earnings Per Share

Basic Earnings per Common Share

Basic earnings per common share is computed by dividing net income to common stockholders by the weighted average number of common shares outstanding during the period, after giving retroactive effect to stock splits and dividends.

Diluted Earnings per Common Share

The computation of diluted earnings per common share is similar to the computation of basic earnings per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if dilutive potential common shares had been issued. These additional common shares would include employee equity share options, nonvested shares and similar equity instruments granted to employees, as well as the shares associated with the common stock warrants issued to the U.S. Treasury Department as part of the preferred stock transaction completed in February 2009. Diluted earnings per common share are based upon the actual number of options or shares granted and not yet forfeited unless doing so would be antidilutive. The numerator is adjusted for any changes in income or loss that would result from the assumed conversion of those potential common shares.

The following table summarizes earnings per share and the shares utilized in the computations for the three months ended March 31, 2017 and 2016, respectively:

	Net Income Available to Common Shareholders		Weighted Average Common Shares		Per Share Amount
Dollars in thousands, except per share data
Three months ended March 31, 2017
Basic earnings per common share	$	211		4,654,386	$	0.05
Effect of dilutive stock securities		—		69,702
Effect of dilutive stock warrants		—		9,922
Diluted earnings per common share	$	211		4,734,010	$	0.04
Three months ended March 31, 2016
Basic earnings per common share	$	358		4,649,558	$	0.08
Effect of dilutive stock securities		—		47,981
Effect of dilutive stock warrants		—		—
Diluted earnings per common share	$	358		4,697,539	$	0.08

For the three-month period ended March 31, 2017 there were 41,481 shares related to stock options that were anti-dilutive because the exercise price exceeded the average market price for the period. For the three-month period ended March 31, 2016 there were 46,321 and 86,957 shares, respectively, related to stock options and the common stock warrant that were anti-dilutive because the exercise price exceeded the average market price for the period. Therefore, they were omitted from the calculation of diluted earnings per share for their respective periods.